Q120 Mr Yeo: Accepting your three
categories of expenditure, it still is not a huge comfort to the
poor old London council tax payer, if they suddenly find that
the £20 a year on a Band D house turns out to be £40
or £50 a year in the later stages, that they have got a bit
of extra infrastructure somewhere in Greater London. It is not
quite the same as the Mayor standing for election on a particular
broad spending to improve the road somewhere in East London, and
we recognise that has a cost to it; this would be a sort of accidental
consequence from the point of view of the taxpayer. I think somebody
ought to be a little bit concerned by your answer to the Chairman
that there is no level of overrun at which the Government would
feel it necessary to relieve the burden on London taxpayers.

Tessa Jowell: It is in everybody's
interest to ensure that the Games come in within the budget which
we have calculated, and it is also important that the bases on
which those calculations and assumptions have been made are transparent.
It is difficult to provide comfort to every hypothetical scenario
that may arise, and we are talking about circumstances that would
apply seven or eight years from now. Of course, the formula which
is in the Memorandum of Understanding was drafted in a way that
reflected the balance of benefit between an increased draw on
the Lottery and, should the need arise, an increased draw from
the London council taxpayer, but I have to say to you that none
of the planning, none of the work which is under way in staging
the Games is predicated on a resort to that failsafe. You would
be quite right to ask me, had we not put that in the Memorandum
of Understanding, "What is going to happen?" and I would
then have to tell you that we were going to go and work it out.
We did work it out, but on the basis that we are keeping as tight
a lock as we can on £2.375 billion.

Q121 Mr Yeo: I am sure you are and,
equally, I am sure everyone would expect you to say that, and
I do not suppose any of those cities which did experience a severe
overrun started out as part of a plan to overrun their cost estimates,
but I have no doubt we will return to that sometime between now
and 2012. Can I move on to the way in which the money is being
drawn from the Lottery? Some of the Lottery funding that has been
allocated will be a diversion from existing Lottery sports distributors.
There will be other sports which are currently receiving money
which will diminish somewhat as a result of this. Do you know
which particular areas of sports investment are going to bear
that cost?

Ms Roche: At the moment we are
not looking at any particular area. If the situation arises we
will clearly work very hard with both Sport England and UK Sport
on what the implications are for them, but our overall aim is,
as a result of the Olympic Lottery gold scratch cards, for example,
that we will reinvigorate interest in the Lottery across the board
and, therefore, Lottery receipts will be maintained or possibly
increased. However, if in the last resort we do need to draw on
the other sports Lotteries we will need to work very closely with
distributors.

Q122 Mr Yeo: Would that include some
sports that are not Olympic sports?

Ms Roche: It could, possibly,
but a lot of governing bodies have talked to us to-date: "Does
that mean that Exchequer and Lottery money in the future is going
to be targeted on Olympic sports to our detriment?" and our
answer to that is: "No, we are absolutely committed to all
sport." After all, we have got 26 Olympic sports but we have
got over 100 other sports, and we have a job to help them all.

Q123 Mr Yeo: However, the possibility
clearly does arise that some sports which have nothing to do with
the Olympics may find that some of the Lottery funding has to
be spent in order to meet the Olympic bill.

Tessa Jowell: I understand the
question but, again, we are getting into the area of hypothetical
speculation. Again, these discussions about the apportionment
of responsibility of funding have taken place with the two sports
Lottery distributors, and of course we will be mindful of what
would be a perceived unfairness and of course we will be mindful
of the long-term effect on performance in other non-Olympic sports
in taking these decisions. These will be decisions taken by the
Sports Lottery distributors in that light.

Q124 Mr Yeo: It is a bit more than
hypothetical, it is actually quite probable that some of the money
will need to be a diversion. Moving on to the non-sporting beneficiaries,
the promotion that Camelot do for the Olympic Lottery, again,
is likely to have some diversionary effect amongst Lottery players,
so other non-sporting causes potentially are also affected by
a drop in their income.

Tessa Jowell: Again, we have dealt
with this and I think, from memory, have submitted quite detailed
evidence to the previous inquiries of the Committee on this. Before
the Olympic Lottery was established, we looked at the likely attrition
rate and the impact on other good causes. We estimatedand
these figures were validated by the National Lottery Commission,
and we subjected them, from memory, to further independent assessmentthat
the figure between now and 2009 would be a 4% impact, which for
most Lottery distributors is about £20 million a year. After
2009, if it was necessary to take a further £400 million
by top-slicing the NLDF, the impact would increase to around 12%.
All these figures have a degree of elasticity depending on the
performance of the Olympic Lottery game. The early signs are that
that is performing very well and Camelot have said that it is
the best scratch card game that they have launched to-date. We
have got to stay on top of this and we have got to monitor the
impact all the time. I think the other message that I would give
to other Lottery distributors is that the Olympics is not some
kind of hungry beast which is sucking income away from them and
diverting it to this rather exclusive cause because, again, consistent
with our ambition of ensuring that every part of the country benefits,
there are enormous potential benefits for heritage in relation
to the Olympic Gamesfor the arts there will be a major
cultural festival that will start in 2008and participation
in sport. Every good cause that the Lottery funds has Olympic
potential without distorting the way in which it allocates its
money. The Olympics can enrich every good cause of the Lottery,
and I hope that the Lottery distributors will very much rise to
that challenge.

Q125 Alan Keen: Just following on
from that question, I was at Edinburgh and other performing arts
events and I have been approached time and again by people who
are really concerned. Have you thought about appointing somebody
from within your Department or a Minister to liaise with Camelot
on this particular issue? It is crucial. I am not a gambler myself
and I tend not to gamble or buy tickets but for the Olympics it
is very likely that I would think I would like to contribute to
that. It is something special, and it is crucial because we do
not want to take any particular revenue support for expenditure
away from arts groups who have relied on it for years; we do not
want to damage their futures. Raising money on the Olympics Lottery
is absolutely crucial to the fundraising. Have you thought of
having a Minister responsible, particularly just for this one
issue, to liaise with Camelot and engender the enthusiasm from
the public to buy these tickets?

Tessa Jowell: Richard Caborn,
the Sports Minister, is also responsible for the Lottery and obviously
we are in pretty regular contact with Camelot. Camelot are the
experts in marketing the Lottery, not the Government. Through
the Lottery Promotions Unit, we have done an enormous amount of
workor the distributors, more especially, have done an
enormous amount of workin promoting the benefits of the
Lottery and making sure that people understand that they can both
become millionaires by playing the Lottery but they can also support
a very wide range of projects from the large and transformational
to the very local, community projects. So a lot of that liaison
with the distributors and with Camelot takes place. What we have
to ensure, but again I think Camelot are best-placed to do this,
is that "Lottery fatigue" does not set in and that the
game continues to be refreshed and continues to attract players
in the very high numbers that it has done previously.

Alan Keen: The Olympic Lottery fundraising
part of it is very special, obviously; it is for one event and
something that people need to focus on. For instance, sports clubs
themselves could play a part around the country in helping to
sell these tickets, which is something quite different from how
Camelot operate normally. I am saying we can focus on this; it
may well bring dividends. I am just highlighting that it is different.

Q126 Helen Southworth: You spoke
about your very considerable concerns to ensure that everybody
across the country benefits from the Olympics, from the nations
and the regions. However, there is going to be very significant
diversion from established Lottery sports distributorsI
think it is £340 millionand the diversion from other
good causes from 2009 is going to be £410 million. How are
you going to ensure that the regions do actually benefit from
the processes of that diversion rather than have everything sucked
down to London?

Tessa Jowell: There are a number
of ways. The first is, as I have said, through the work that we
intend to do with the Regional Development Agencies in promoting
and ensuring that they take the initiative in promoting and seizing
the economic benefits of the Olympics. Those are beyond the Lotterymaximising
the benefits of tourism, and the opportunities to host preparation
camps for athletes. I have had a recent meeting with the Japanese
National Olympic Committee, for instance, and they are very keen
to establish a preparation camp in this country and, in the run-up
to the Games, for their athletes to work with young people in
our schools in the sports that they are particularly accomplished
at. In the early days of looking at how we spread the benefit
that is another one of the ways. I referred to the very large
number of contracts that will be let. There is absolutely no reason
why active and engaged Regional Development Agencies should not
be looking at the potential for businesses in their regions. Of
course, there is the cultural festival which will start with Liverpool
being Capital of Culture in 2008 and we will see a programme across
the country of Olympic-related cultural activity between 2008
and 2012. It is entirely the case that were we to do nothing the
benefits would fall disproportionately to London, but the consequences
you describe are the consequences of having taken a decision to
bid for the Olympics and to win the Olympics. That was why the
issues (returning specifically to the Lottery) concerning the
consequences for the Lottery were given a very full airing both
in the Olympic Lottery Bill and, also, in other debates on the
floor of the House and around the country. So there will be a
consequence for other good causes. My answer to the heritage and
arts and other good causes would be that each and every one can
be enriched by engaging with the potential for the Olympics, but
the short-term consequence on their share, on figures that we
believe to be prudent and cautious figures, is a consequence of
the decision we took to bid for the Games.

Q127 Helen Southworth: Can I focus
very specifically on the geographical impact of diversion rather
than on a diversion towards an Olympic change? How are you going
to measure the impact on the regions of diversion to make sure
that it is equitable and that we do not find that there is disproportionate
loss from some areas, or that projects that are being worked up
in some areas disappearsports clubs, sports centres, schools?
There are going to be lots of things within the regions that really
have to work if the Olympics are going to work.

Tessa Jowell: Matthew, would you
like to start on this?

Mr Symes: Yes, I would like to
elaborate on one point, just winding back a little bit and touching
on the first part of your question. We have been looking recently
with the Olympic Board at the whole question of legacy and what
is legacy. A lot of legacy to us means benefits, and that has
taken us into this question of: "So where do the benefits
apply round the nation?" That has now taken the thinking
to the point where we are now setting up a Nations and Regions
Group in conjunction with LOCOG to look at a distribution channel
for getting benefits delivered and properly harnessed around the
country. Your recent question was how do we measure the benefits?
What we are looking at now is the benefits that were articulated
and how to translate those into practical plans and projects which
will be delivered around the country. We are doing that with LOCOG
and setting up a Nations and Regions Group which will be basically
responsible as a channel for benefits around the country for organising
and co-ordinating all activity around the country and forto
answer your questiontracking the benefits in a coherent
way. So this is not: "Let it happen in an uncontrolled way"
and it is not: "Don't do anything at all"; it is: "Do
something, plan it and co-ordinate it through this Nations and
Regions Group", which we, as the Department, are working
on in parallel with LOCOG. So we are just getting going on that
now; the first meeting will be in November and then we will have
a series of meetings with representatives from around the nations
and regions. So this will be a project which is properly co-ordinated
and planned.

Q128 Helen Southworth: Will the Lotteries
also have a responsibility for ensuring that this is distribution
that is equitable across the regions?

Tessa Jowell: As you know, we
have taken some important steps, as a Government, to ensure equitable
distribution of the Lottery, and the steps that we have taken,
through Fair Shares and other initiatives, have quite substantially
reduced the inequalities that were beginning to creep into the
pattern of distribution five or six years ago.

Q129 Helen Southworth: Finally, can
I ask a rather practical question? Will projects that are working
up plans that, perhaps, are in-phase be given good advice about
how to put those things forward, bearing in mind that there is
going to be significant diversion of resources in the future away
from some types of projects, so that we do not get the kinds of
things we have had sometimes in the past, phase one going ahead
and phases two and three disappearing?

Tessa Jowell: This is actually
a bigger question, I think, about the way in which Lottery distributors
make their decisions about the allocation of grants. A number
of them, particularly where the sums involved are large, put applications
through two stages, maybe in some cases even three stages, so
this is a way of filtering down applications and focusing then
on those that are most likely to deliver according to the project
specification. So there is not any intention to interfere with
the Lottery distributors' approach to doing that, but there will
be a dedicated Olympic Lottery distributor, which is in the process
of being established at the moment, and the big Lottery funds
will have a particular role in being more proactive in providing
advice and help to local organisations in drafting bids for the
Lottery that give them the best chance of success.

Q130 Janet Anderson: Secretary of
State, I think I am right in saying that the contract for the
Lottery comes up for renewal in 2009. Does it concern you, in
the run-up to the Olympics, that we might be in a position of
having a changed distributor, and might you consider just sticking
with Camelot?

Tessa Jowell: We had a question
on the floor of the House about this yesterday. Obviously, we
looked very carefully at the potential impact on competition for
the operator. The advice that we have from the National Lottery
Commission and others was that the competition should proceed
as per the timetable, and that the Olympic Lottery would not be
adversely affected by that. Obviously, the timing of the Olympics
and the critical role that the Olympic Lottery has to play was
a consideration but it was a consideration that led to the conclusion
which was announced, which is that the competition should proceed.

Q131 Chairman: Did you carry out
a risk assessment in reaching that decision?

Tessa Jowell: We took advice from
the National Lottery Commission, from Lord Burns and, also, from
the Office for Government Commerce.

Q132 Chairman: Did you talk to the
London 2012 Committee?

Tessa Jowell: They were aware
of the position.

Q133 Chairman: They are relatively
relaxed about that?

Tessa Jowell: Yes. We are all
vigilant about seeing off any risks at all, but the overwhelmingin
fact the unanimousadvice that we have as Ministers was
that the competition should proceed.

Q134 Mr Sanders: Can you explain
how, in practice, the provisions of the London Olympics Bill relating
to marketing will operate and how you intend to police them?

Tessa Jowell: This will be very
much a responsibility for the Local Organising Committee. The
provisions to protect the Olympic symbolsnot just, in the
case of London 2012, the Olympic symbol but we will now also extend
protection to the Paralympics symbolare contained in the
Olympics Bill which completed its committee stage in the Commons
last week. The objective is a very simple one: I talked earlier
about the importance of maintaining the value of sponsorship income
and the fact that we will be seeking large amounts of sponsorship
from high-value sponsors whose association with the Games must
be clear, commercial and worth the amounts of money we want them
to spend on it. So the purpose behind the regime, which is not
a new regime but very much built on the regime that Sydney used
to prevent ambush marketing, is to prevent anybody who does not
have a legitimate commercial association with the Olympics from
asserting that they do. How that is actually applied in practice
will be consistent with all our expectations of proportionality
and will be taken on a case-by-case basis. I think there have
been some rather florid and over-excited examples of how this
might be applied. There will be no ban on referring to "Summer",
there will be no ban on referring to the "Summer of 2012",
and as we get closer to the Games then a body of case law will
begin to emerge.

Q135 Mr Sanders: How is that going
to work in relation to the small businesses that will clearly
have an association with the Gameshospitality, hotels,
bars and restaurants that are all likely to benefit from the Gameswho
may wish to market that they have an association with the Games
by virtue of their location in London?

Tessa Jowell: I think the position
in law will be that if they have a pre-existing title which suggests
an association with the Olympics then they will be allowed to
keep it. If it is an association that they assert simply by virtue
of geography it will not be allowed under the terms of the ambush
marketing proposals.

Q136 Mr Evans: Can I ask one additional
question? Does that mean that pubs will be allowed to advertise
outside their pubs to say: "Watch the Olympics on our big
screen"?

Tessa Jowell: In order that I
give you exactly the correct interpretation, can I write to you
about that? I am not a lawyer, I am a politician, and I want to
make sure you have the very best advice on that.

Q137 Mr Sanders: That is actually
very important because there are many parts of the country outside
of London who would be marketing themselves overseas as a potential
place to visit during the Games and associating themselves with
the fact that they are part of the country that is hosting the
Games. So it is both an issue for small businesses in London and
for many communities outside of London.

Tessa Jowell: This may not reassure
the Committee but let me just say that I have already made the
point that there will be no blanket ban on using words like "summer"
and "games", and context is all important, I am advised,
and that the courts will ultimately decide what is fair. Factual
references to London and the Olympics will still be perfectly
legal. So I suppose it will be a matter of fact that the Dog and
Duck in Stratford East may be showing the Olympics on a given
night during 27 July and the middle of August in 2012.

Q138 Mr Evans: It would be daft,
though, would it not, if a pub faced prosecution for saying: "Come
and watch the Olympics on our big screen"?

Tessa Jowell: It would be daft.
All these provisions have got to be able to meet the kind of commonsense
rule, and I hope that as the case law is established in practice
that will happen.

Q139 Mr Yeo: Last month your department
said that UK Sport would lead on delivering success in high performance
sport, developing elite athletes, and so on, and that Sport England
would focus on the development of community sport and grass-roots
participation. Would you like to enlarge on that and say how it
is going to work in practice and why it is a good thing?

Tessa Jowell: It is a good thing
because I think one of the complaints about the management of
sport in this country has been its fiendish complexity and lack
of clarity; so we will have a structure which is completely clear
where Sport England will carry responsibility for promoting participation
and helping to meet our very demanding PSA target, which is to
see an increase of 3% in the numbers of people playing sport by
2008. That is 400,000 people a year. It is, I think, the most
demanding target set by any government for increasing participation
in Europe, so we have to have an organisation which is dedicated,
fit for purpose to do that, and I pay very warm tribute to the
Chairman of Sport England, the Board and the staff of Sport England
for driving through a programme of reform that means that we are
almost at the point where Sport England is 25% of the size it
was five years ago, with very much a focus on overseeing performance
in relation to meeting this target. Then you have UK Sport, which
will take on some of the responsibilities for performance and
elite development which have previously existed with Sport England,
UK Sport which will have an exclusive focus on promoting elite
performance, bringing on young champions, in addition to the international
responsibilities that it has, and, of course, its world recognised
reputation for anti-doping. The overriding reason for pursuing
the course of action that we have done, and it has taken us about
three years to get here, is clarity, fitness for purpose, which
was sort of accelerated by winning the Olympics and our hopes
of very good medal performance by our athletes in front of a home
crowd in 2012.